Auditor assails Pennsylvania health department on city AIDS spending

The Pennsylvania Auditor General's Office criticized the state's oversight of HIV/AIDS prevention funding Wednesday in a report that alleges more than $700,000 in waste, abuse, and potentially fraudulent spending by the Philadelphia Department of Public Health.

Among their findings, auditors uncovered duplicate invoices totaling $223,000 that were submitted by the city's AIDS Activities Coordinating Office (AACO) and paid by the state Department of Health during fiscal 2008, the key period examined.

An additional $38,000 was deemed inappropriate, including $13,000 for T-shirts, $7,000 to take college students to a water park in Wildwood, and other money considered incentives for people to participate in HIV-awareness campaigns.

Officials for the city and state departments said that all the duplicate payments had since been reconciled, and that changes in monitoring and approval procedures had been, or were being, made. They defended the use of cash incentives, which federal guidelines recommend for risk-reduction programs.

The state Health Department pays 60 contractors to carry out prevention services such as HIV testing, counseling, and risk-reduction education. The auditors reviewed a sampling of documentation totaling $774,000 for 11 of them; it found no problems with 10.

But in Philadelphia, where more than half the state's HIV-positive population lives and which receives about half the state and federal prevention funding for Pennsylvania, about 90 percent of the submitted invoices raised questions for the auditors. Most involved missing or inadequate documentation of expenses.

The report did not name Philadelphia, although city and state officials said it was the unidentified contractor. The audit targeted the Pennsylvania Department of Health because it is the state agency with oversight.

Auditor General Jack Wagner, a candidate in the Democratic gubernatorial primary, referred the report to state and federal officials, including state Attorney General Tom Corbett, who is competing in the GOP primary.

Overall, the audit found a lax system for reviewing and documenting contractors' requests for reimbursement. Auditors said they had sought documents from the contractors after the state Health Department could not provide them.

The state department "takes the audit very seriously and agrees that more oversight" is needed, spokeswoman Stacy Kriedeman said. "We have already started to implement several changes to our policies and procedures."

Nan Feyler, city health department chief of staff, said the duplicate invoices had occurred when AACO "was in the midst of staff changes several years ago, and systems are in place so that this will not happen again."

"This was a wake-up call certainly that things were sloppy," she added.

Jane Shull, executive director of Philadelphia FIGHT, an AIDS services organization, said she was surprised to find one of her programs among the auditors' examples of wasteful spending on incentives by the city's subcontractors. It paid $100 each to 21 recently incarcerated, HIV-infected people upon completion of an intensive five-week program, Project TEACH Outside. A key goal is to prevent transmission of HIV to others.

"People come for the money, and they stay for the program," Shull said. "I think it is completely legitimate for us to offer something to people for their time."